Sainsbury’s merger with ASDA has come under intense scrutiny by former farmer and Tiverton MP Neil Parish.

Mr Parish is among several MPs preparing to trigger the inquiry amid concerns Britain’s farmers could face unprecedented demands for price cuts.

The current deal between the two supermarket heavyweights will create a £51 billion giant and would mean scrutiny not only from Mr Parish and fellow MPs but also the Competition and Markets Authority who announced its own investigation.

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Tiverton and Honiton MP Neil Parish who is also the chairman of the Commons food and rural affairs committee, has already conducted private hearings on the matter ‘with a view’ to launching a full select committee inquiry.

He said: “They [farmers] are nervous. They’re aware the deal has been referred to the CMA and are holding back some of their fire. But I’m suspicious and I need some reassurance.

“The role of the select committees is to look at the process and say: Is it going to deliver the right things? Are the primary producer and the consumer both going to be treated fairly?”

Neil Parish

Business Minister Andrew Griffiths, whose responsibilities include consumers, small businesses and the retail sector, is understood to have been invited before the food and rural affairs committee to discuss the deal as part of preliminary hearings.

In a letter sent to Griffiths, Parish said: “Farmers and suppliers are already in a difficult position. This announcement and the increase in the market share for the combined supermarket tips the already unbalanced scales further away from farmers.’

He wants more scrutiny of the way the supermarket sector operates so ‘everyone, right the way through the supply chain must benefit, from the consumer to the farmer’. One potential line of inquiry is the possibility of strengthening the powers of the trade watchdog, the Groceries Code Adjudicator.

In a letter sent to suppliers last week, Sainsbury’s said the deal offers ‘a great opportunity to make your supply chains more streamlined, to develop differentiated product ranges and to grow your business as we grow ours’.

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Sainsbury’s last night said it ‘strongly believed’ the deal ‘will benefit both customers and suppliers alike’. It said: ‘Our strong track record of working closely with our suppliers will not change.’ ASDA said it had ‘long-term relationships’ with suppliers.

But some farmers fear they will pay a heavy price because Coupe has said the enlarged business would cut shop prices of some grocery items by 10 per cent – and he has told the City a merger will boost profits by £350 million from ‘access to better-harmonised buying terms’. Charles Sercombe, chair of the National Farmers’ Union livestock board, said: ‘There is massive nervousness out there, especially when Mike Coupe says he’s going to try to drive the price down 10 per cent.